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The average mortgage rate will hit 3.2 per cent by the end of 2019 from its current level of 1.95 per cent, according to Mr Stansfield.

He said the increase will hit house price growth but not send values crashing.

In a research note Mr Stansfield added: "We believe that employment levels will stay high and the growth outlook will improve.

"Add in the fact that, in recent times, new loans have been subject to affordability tests, and we do not think that such rate rises will drive up mortgage arrears or forced sales which could trigger house price falls."